Feed in Tariffs
The Clean Energy Cashback scheme
Feed-in Tariffs (FITs) were brought in by the UK Government in April 2010, after having been used successfully in other European countries for a number of years.
The scheme makes payments to householders who generate their own electricity from renewable sources such as solar electricity. The main payment - the 'generation tariff', is based solely on the amount of power generated by a solar array - whether you used that electricity yourself or not. However, there is an additional payment for the electricity that you export to the national grid. These payments are in addition to the bill savings made by using the electricity generated on-site.
On a typical installation on an unshaded south-facing roof in Cambridge, you can expect to make savings and receive feed-in-tariff payments each year totalling around 7-10% of the initial purchase price of the system.
How the scheme works
If you are eligible to receive the FIT then you will benefit in 3 ways:
1. Generation tariff – a set rate paid by the energy supplier for each unit (or kWh) of electricity you generate. This rate will change each year for new entrants to the scheme (except for the first 2 years), but once you join you will continue on the same tariff for 25 years. At the moment it is 41.3p per kWh generated if your solar array is under 4kW in size and is retrofitted to an old property, or 36.1p per kWh if your solar array is between 4 and 10kW in size, or is on a new-build property.
2. Export tariff - you will receive a further 3p/kWh from your energy supplier for each unit you export back to the electricity grid, that is when it isn’t used on site. In practice, for small household arrays, the electricity companies don't actually measure the exported electricity however - they simply assume that 50% of the electricity generated is exported. This may change when smart electricity meters are finally rolled out, as the government keeps promising.
3. Energy bill savings – you will be making savings on your electricity bills, because generating electricity to power your appliances means you don’t have to buy as much electricity from your energy supplier. The amount you save will vary depending how much of the electricity you use on site.
As an example, a typical domestic solar electricity system, with an installation size of 2 kWp could earn around:
- £700 per year from the Generation Tariff
- £25 per year from the Export Tariff
- £110 per year reduction in electricity bills
This gives a total saving of around £830 per year.
All generation and export tariffs will be linked to the Retail Price Index (RPI) which ensures that each year they follow the rate of inflation.
Only systems that are installed by an company registered under the Microgeneration Certification Scheme (MCS) will be eligible for feed-in tariff payments. We operate in partnership with an MCS-accredited company, so our systems are eligible for feed-in tariff payments.